This fast moving world is not going to stop until it ends, and people wants to move even faster when it comes to earning, saving and developing. There are certain elements such as: investments, saving, tax saving and reduction and rebate and other stuff related to money. Talking about money and investment brings us to the topic of a RIC company in Australia, yes! Most of us might not have heard of this term RIC but this is something simple and we all must have dealt with it once in our life. RIC means “Regulated Investment Companies” okay! Fellows don’t get confused to make it easier to understand for the reader, RIC is just a code on the back hand; actually the financial institutions are considered as RIC companies in Australia and registered as RIC companies in the books of the government.
Mutual funds:
All mutual fund companies are registered to tax by the government as a RIC company, in layman term a company which touches the criteria of a certain tax deduction is registered as a RIC company in short. Certainly these companies play a significant role in the economy of giant countries such as: Russia, America and China. It’s basically a type of tax deduction other than commercial and private tax deduction companies.
What it takes to be registered as a RIC corporation:
There are certain parameters which a company has to fulfill in order to be registered as a RIC company such as:
Diversification:
A company must have asset diversification, so much so, before the actual registration there is a test to identify whether a company has proper asset diversification or not? Otherwise that vary company would not be labeled as a RIC company.
Investment income:
Another rule of the game is that there is no way that the income of the company must be derived from investment activities. Like mentioned above mutual fund companies are labeled as investment companies and they derive majority of their from investment activities hence, can be labeled as a RIC company.
Distribution to the stockholders:
Another aspect is that a company must distribute its income among shareholders/stockholders. In a nutshell the stock companies, investment companies are RIC companies and can be tax as a RIC company altogether. It is pertinent to mentioned that the aforementioned rules are the basics and there are some more rules which are technical and require professional assistance for understanding. A RIC corporation or a company can deduct distributed dividend as well to its shareholder. All in all it’s a type of a company which an investment firm can become by registering itself in the books of the government only after meeting certain criteria. Visit Entracon Civil Pty Ltd to find out more details.